As more and more Altadena residents choose to sell their fire-ravaged properties instead of rebuilding, owners are encountering a softening real estate market in which prices and the rate of sales are declining, according to data and interviews.
It’s impossible to know the long-term prospects of the market, but real estate agents and others say property sales are slowing as inventory grows and owners list their properties at lower prices.
The shift comes at a crucial moment — six months after the Eaton fire destroyed more than 6,000 homes, residents are facing the wrenching dilemma of whether to rebuild or move on.
Teresa Fuller, an agent in Altadena, described the post-fire timeline for sellers this way: “January, devastation. February, trickle. March, a few dozen went on market, and most if not all sold.”
But now, with a greater number of lots on the market and relatively few closing sales, the “absorption rate is going down, down, down,” she said. In the first week of July, 29 new lots went on the market in Altadena, she said, and only four sold.
Fuller said a couple came to her in March with a lot she estimated would get $905,000. Now they’re ready to list, but with a far lower estimate: $730,000. The homeowner cried when she heard the figure, saying, “This is all we have to move on,” according to Fuller.
Another lot she represents dropped from $1.295 million to $795,000.
Fuller provided The Times data from Altadena Multiple Listing Service lot listings since March, which totaled hundreds of listings.
The Times analyzed the data and found:
- The ratio of active listings to properties that are pending a sale or under contract to sell has significantly increased.
- In mid-March, there was about one active listing for every listing in the process of selling. Now, the ratio is 10 to 1.
- Although the number of active listings has quadrupled from March to July, fewer lots are closing each week.
- The most recent data show nearly 160 listings available, with about 10 closing per week.
This is just a snapshot of a moment, and it is possible the Altadena market will improve. Southern California has long suffered from a housing shortage, and many believe Altadena will remain a desirable location to build and live.
Lottery winner saw investment opportunity
Among the biggest buyers of land here is Black Lion Properties, a limited liability company that offers little information online and is managed by brothers Jesse and Edwin Castro. Edwin, who grew up in Altadena, won a $2-billion Powerball lottery jackpot in 2023 and has used some of his winnings to purchase more than a dozen lots burned in the Eaton fire.
“They formed Black Lion Properties LLC because they love and care about the Altadena community and saw an opportunity to invest in it that would also help some impacted homeowners move forward while helping it retain its character and charm,” spokesperson Terry Fahn wrote in a statement to The Times.
The brothers have bought the second-largest number of Altadena lots since the fire (at least 13), narrowly trailing real estate developer Ocean Development (at least 16). Fahn said in the statement that Black Lion plans to use some of the lots for their family. The Castro family home in Altadena was spared in the Eaton fire, though a luxury property they owned in Malibu burned down in the Palisades fire, Fahn said.
“Black Lion Properties anticipates that half the lots that were purchased will use the preexisting plans,” Fahn wrote, “and the others will remain single family homes with new plans and designs.”
Ramiro Rivas, a real estate agent in Altadena, anticipates that larger firms will step into the market as more lots become available.
“There will be bigger players coming in at larger scale,” he said, calling Black Lion “a drop in the bucket compared to what’s to come.”
A burned property on Wapello Street, in Altadena, finds a buyer.
(Robert Gauthier/Los Angeles Times)
Painful choices
Art Davis didn’t think he’d end up as a seller. He so loved his Altadena neighborhood that he was known as the mayor of his street. And after the Eaton fire incinerated his home, the 82-year-old wanted to rebuild. At dinners with neighbors, they rallied around the idea of resurrecting their community.
But hurdles began cropping up immediately. Just finding a rental for Davis and wife Mary was “insane,” said Davis’ daughter Gina Gurewitz. “They were putting in applications and going against 40 other applicants.”
They eventually moved into a South Pasadena rental unit with Mary’s brother and, once their lot was cleared, began to speak with builders, Gurewitz said. The most optimistic timeline for rebuilding was two years.
Then they got the news that their landlord would need the rental back at the end of the year.
Davis told his daughter that he didn’t think he could handle another move before the ultimate move back to Altadena, his home of 15 years.
“I saw it dawning on him, this dream of being back in this place fading away,” Gurewitz said. The only option was to sell.
‘More competition’
Hundreds of families are facing similar choices.
Early on, when inventory was low, lots were “shooting above” their listing prices, Rivas said. Now, “the inventory is consistently increasing, and because of that you do have more competition,” he said. Sellers are forced to price more competitively.
Soon after the fires, the average lot sold for up to $72 per square foot. However, current listings average closer to $69 per square foot and are a struggle to sell, he said. This equates to a $21,000 decrease in the price of a 7,000-square-foot lot.
“I have a lot of people that are in queue wanting to put their properties for sale,” Rivas said. “People are talking to the contractors and architects and they’re looking at what it will cost to rebuild what they had,” and in some cases, they aren’t covered by insurance to replace the house as it was before, as costs go up.
As her family confronts the decision to sell, Gurewitz has noticed a change in social pressures around the market for lots. If neighbors mentioned selling several months ago, she said, they received intense negative feedback.
“In public, they would be like, yes, we’re going to rebuild,” she said. In private, they would confide that they were unsure.
“Nobody wanted to admit that because it was considered to be letting down your neighbors,” said Gurewitz, who lives in South Pasadena.
Even her friends who were most committed to the cause of rebuilding are now reconsidering. Now people are being more supportive of the idea of selling.
As they enter a brutally competitive buyer’s market for lots, her parents will also be contending with an expensive market for housing elsewhere.
“To have this happen at this stage in their lives,” she said, “is just so disruptive that the goal now is to get them into a place where they can just be and feel safe.”